HRS § 237-22 — Conformity to Constitution, etc


§237-22 Conformity to Constitution, etc.
(a) In computing the amounts of any tax imposed under this chapter, there
shall be excepted or deducted from the values, gross proceeds of sales, or
gross income so much thereof as, under the Constitution and laws of the United
States, the State is prohibited from taxing, but only so long as and only to
the extent that the State is so prohibited.
(b) To the extent that any deduction,
allocation, or other method to determine tax liability is necessary to comply
with subsection (a), each taxpayer liable for the tax imposed by this chapter
shall be entitled to full offset for the amount of legally imposed sales, gross
receipts, or use taxes paid by the taxpayer with respect to the imported
property, service, or contracting to another state and any subdivision thereof;
provided that such offset shall not exceed the amount of general excise tax
imposed under this chapter upon the gross proceeds of sales or gross income
from the sale and subsequent sale of the imported property, service, or
contracting. The amount of legally imposed sales, gross receipts, or use taxes
paid by the taxpayer with respect to the import shall be first applied against
any use tax, as permitted under section 238-3(i), and any remaining amount may
be applied under this section for the same imported property, service, or
contracting.
The director of taxation shall have the
authority to implement this offset by prescribing tax forms and instructions
that require tax reporting and payment by deduction, allocation, or any other
method to determine tax liability to the extent necessary to comply with the
foregoing.
The director of taxation may require the
taxpayer to produce the necessary receipts or vouchers indicating the payment
of the sales, gross receipts, or use taxes to another state or subdivision as a
condition for the allowance of this offset.